Businesses in boxes: how solar is creating African entrepreneurs

Access to power is a major issue in Africa, and in solar, many people feel they have the solution.

Yet solar is doing more than switching on off-grid populations, and providing a potentially lucrative and investor friendly business opportunities to companies like M-KOPA Solar and BBOXX.

It is also helping to create a middleman later of “solarpreneurs”, offering people the chance to make revenues by offering people in disconnected areas solar services.

One such company doing this is Rwandan hardware-as-a-service company ARED, which is empowering local people with a “business in a box” solar kiosk platform that enables them to start their own businesses by charging phones and selling virtual top-ups.

Launched in January 2013, ARED is focused primarily on women and disabled individuals, and shares revenues with the micro-franchisee.

“We recruit, train and monitor the kiosk operators and we share the revenue on most of the services we provide on the kiosk,” chief executive officer Henri Nyakarundi (CEO) told Disrupt Africa.

“We mostly focus on women and people with disabilities because they are the most vulnerable groups in our society. We have been able to develop the smartest kiosk in the market where we can also collect data from the kiosk to better monitor our operators using IoT technology such as how many phones they charge in real time on all the kiosk.”

Nyakarundi said he believes the antidote to poverty is economic opportunity, but there is not enough of that on the continent.

“I started looking at the informal sector, and saw the boom of cell phone usage on the continent and the need to charge was growing. I realised a solar kiosk could be the answer,” he said.

“In Rwanda people can also pay for government services at the kiosk. We do mobile money, and the micro franchisees earn a commission on all of that,” said Nyakarundi.

He said the solar aspect is key.

“You cannot run a digital business without access to electricity. We would not be able to provide all those services without solar technology. Solar technology has made micro business possible,” Nyakarundi said.

“Instead of someone having to rent an office to get connected to the grid, with solar we can build a green business in a box. It also lowers the cost of running a business, no electricity needs to be paid, there is no office to rent and no infrastructure to be built. It is perfect for the African market, and perfect to address the unemployment issues that exist on the continent.”

One person taking advantage of the opportunities offered by ARED is micro-entrepreneur Marcel Semacumu, who was a Tigo cash agent beforehand.

“I have managed to earn a constant income and stabilise my household because even without selling services at the kiosk on a quiet day I still earn from phone charges,” he said.

He said he feels empowered because of all the agents he works alongside he is the one with the best bouquet of services.

Another startup doing a similar thing is Uganda’s Musana Carts, which aims to offer a path to a sustainable, reliable income through street vending. Each Musana Cart comes complete with an eco-friendly stove, light bulbs and phone chargers, all powered by a solar panel. The startup also provides access to finance, business and WASH training, as well as a business licence.

Founder Manon Lavaud told Disrupt Africa the startup made street vending in Africa a clean, safe and professional way of earning a sustainable livelihood.

“We do that by providing street vendors with a clean street food cart, a community of support and training on food hygiene practices,” he said.

“We came with the idea while we were looking at how we could leverage the potential of street vendors, who work so hard – more than 12 hours a day, seven days per week – yet earn so little, less than US$5. Street vendors really create value in urban spaces, more than 2.5 billion people eat street food every day around the world. Simply because street food is affordable, abundant, delicious and has a local and emotional flavour.”

The idea of Musana Carts is to give back to the vendors the value they create.

“We realised they needed to be associated with a trustworthy brand and ultimately with a clean and innovative concept,” Lavaud said.

“We give them their dignity back. Our vendors are not harassed by the city anymore as they comply with the city requirements, they can work in a more constant way. They are a part of a supportive community.”

Franchisees make money by selling food from a hygienic cart, which ensures consistency and quality.

“By formalising them and making them cleaner we decrease their risk of being shut down by the city authorities and ensure them a more stable income,” said Lavaud.

“Down the road they will have the opportunity to become mobile money agents and become outlets to distribute any kind of additional products.”

He said solar as a reliable and cheap source of light was game changing for vendors.

“The vendors view it as an opportunity to increase visibility. They are often the only point of light in the market and it enables them to work later into the night to increase sales,” Lavaud said. “Solar is preferred over kerosene lamps, the national grid or any semi-legal connection due to its cleanliness, lack of daily fuel costs, brighter light, safety and reliability.”

He said the Musana brand had already seen a lot of traction.

“People in the streets see a nicer cart, a branded uniform and other visual branding, and they appreciate it. Mainly because they perceive it as more hygienic and they want to be part of the brand. Solving the hygiene issue of street vending is the main persuasion for both the vendors and the street food consumers,” said Lavaud.

Robert Okello, a 25-year-old Musana vendor, says using one of the startup’s solar-powered carts allowed him to work for himself and control his own destiny.

“They include me in a community of street vendors which helps me with my day-to-day business. It makes my feel customers like I take care of them and that my food is better,” he said.

Having previously worked at a hotel in Kampala and as a cook in a local restaurant, Okello now feels like he is an entrepreneur.

“Working from Musana Carts and wearing the brand give me the feeling of professionalism and it encourages customers. I’m proud of my business and I aspire to make it bigger,” said Okello.

Tilden Hellyer, an industry analyst for Energy & Environment at Frost & Sullivan, says the volume of mobile subscribers requiring a charged phone and access to the network has been growing exponentially in East Africa over the last few years. Solutions like ARED and Musana Carts are filling an important gap.

“With an electricity penetration rate of just 20 per cent, and Internet access reaching only 15 per cent, an on-the-go mobile charging market is developing to address both issues. These mobile kiosks use green energy to power the enormous mobile phone market. For the emerging middle class, this is an ideal solution for the busy lifestyle of East Africa,” he said.

Hellyer said the mobility aspect means that these units are able to move to suit demand rather than waiting for demand to arrive at a stationary point like a shop – maximising the visibility in busy centers or markets.

“Mobile flexibility gives these vendors an added advantage over stationary vendors as administrative issues around vendor authorisation within Kigali are tedious. Ultimately, the units are not permanent, so they bypass this requirement,” he said.

He said the growing mobile phone sector was testament to the sustainability of the solar-powered businesses-in-boxes market.

“The smartphone is part of this market and, in general, requires charging, more often and more frequently. While cheaper models tend to last for several days, and may require fewer services from the kiosk, they are nonetheless customers,” Hellyer said.

“The companies are supported by its multi-functional capabilities, the one-stop solution, besides mobile charging, also offers other services, such as the extensively used mobile money, WiFi, airtime credit and other B2B solutions. These developments allow customers to access a knowledge base that they were not able to before kiosks moved into their communities. Such developments are needed and will be sustainable.”

Hellyer said as long as the mobile phone (both smart and non-smart) market increases at a quicker rate than electricity supply and accessibility, the need for such a simple solution will succeed in Africa.

“The future potential of this endeavour can be benchmarked by the major successes of telecommunications,” he said.

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.